Political parties made Rs 4,662 cr in 7 years!

September 10, 2012 18:10 IST

A major part of the income of India's political parties comes from donations and voluntary contributions. Vicky Nanjappa gives us a break up of how much of the Rs 4,662 crore earned by parties from the period of 2004 to 2011 came from donors

Political parties in the country earned Rs 4,662 crore in the past seven years most of which has come in the form of donations. Based on a list donors submitted to the Election Commission for the period 2004-2011, two non-profit bodies -- Association for Democratic Reforms and National Election Watch -- released a report on incomes.

The General Electoral Trust, the Public and Political Awareness Trust, Bharti Electoral Trust, Electoral Trust, Harmony Electoral Trust, Satya Electoral Trust, Chowgule Charitable Trust and the Corporate Electoral Trust are the bodies that have maximum donations to parties. Topping the list is the General Electoral Trust, which contributed Rs 36.46 crore to the Congress and Rs 26.07 crore to the Bharatiya Janata Party between 2004 to 2011.

The Bharati Electoral Trust donated Rs 11 crore to the Congress and Rs 6.10 crore to the BJP in 2008-2009. The Public and Political Awareness Trust made an overall contribution of Rs 9.5 crore to the BJP during 2004-05.

The contribution of the Electoral Ttrust are as follows -- Rs 9.96 crore to the Congress in 2004-05 and 2009-0, Rs 6.82 crore to the BJP in 2004-05 and 2009-10, Rs 30 lakh to the Janata Dal-United in 2009-10, Rs1.58 crore to the Samajwadi Party in 2004-05 and 2009-10.

The Harmony Electoral Trust made a contribution of Rs 2 crore to the Congress and Rs 1.50 crore to the BJP during the 2009-10 while Satya Electoral Trust had made donations amounting to Rs 2 crore to the Congress and Rs 1 crore to the Nationalist Congress Party during 2009-10.

The top ten companies, which made the maximum contributions, are the Torrent Power Ltd donating Rs 14.15 crore to the Congress during the 2003-04, 2007-08, 2009-10 and 2010-11 and Rs 13.00 crore to the BJP during the financial years 2007-08 to 2010-11.

Sterlite Industries, a subsidiary of the Vedanta Group, donated Rs 6 crore to the Congress during 2004-05 and 2009-10 while Madras Aluminium Co Ltd also a subsidiary of the Vedanta Group had contributed Rs 3.5 crore to the BJP.

Southern Engineering Works Constructions, SEW Infrastructure and Videocon Industries are other major donors who contributed to the Congress, BJP, NCP and the Communist Party of India. ITC is also a major donor making contributions to the Samajwadi Party (Rs 78 lakh), AIADMK (Rs 55 lakh) and RJD (Rs 33 lakh) between 2004 and 2011.

ADR filed a Right To Information application to the Election Commission to obtain contribution reports filed by six national parties and 36 recognised regional/state parties between FY 2004-2005 till FY 2010-2011.

As per the records maintained with the EC and the response received from the CPIO/Appellate Authority, five national parties -- the Congress, BJP, BSP, CPI and CPM -- have filed their contribution reports from 2004-2005 till 2010-2011. The NCP is the only national party who has not submitted its contribution reports from FY 2004-2005 till FY 2006-2007. However, it has submitted its contribution reports from FY 2007-2008 till 2010-2011.

As per EC records, only five regional/state parties have regularly filed their contribution reports from FY 2004-2005 till FY 2010-2011. These are the Samajwadi Party, AIADMK, Janata Dal-United, Shiv Sena and Telugu Desam Party.

Eighteen regional/state parties have never filed their contribution reports to the Election Commission from FY 2004-2005 till FY 2010-2011. Many of these defaulting political parties who have never filed their contribution reports for the mentioned time period are ruling parties/major opposition parties in their respective states.

In addition to the above, many of the major regional/state parties have not filed their contribution reports for all the years with the EC. These are Shiromani Akali Dal, DMK, Rashtriya Janata Dal, Lok Janshakti Party and Janata Dal Secular. Some parties have only provided information of their earnings for one year -- Biju Janata Dal (2010-2011), Telangana Rashtra Samiti (2010-2011) and Sikkim Democratic Front (2009-2010).

Laws relating to donations to political parties

Section 29C of the Representation of People Act, 1951 states that political parties are required to submit contribution details received in excess of Rs 20,000 from any individual or a company. This section has been interpreted by political parties as to include every single donation made only above Rs 20,000 by any person at one time. However, as per the provisions of this section, it must also include in it, multiple donations made by the same person, entity or company aggregating to Rs 20,000 or above during the said financial year.

In addition to this, the coupon system adopted by political parties makes it difficult to establish the identity of the donor since coupons are issued in lieu of receipts and transactions are made in cash. This implies that a lot of cash donations received remain unaccounted for in the books of accounts since only those amounts for which a receipt has been issued would be accounted for. These donation coupons are ostensibly below Rs 20,000 though these may aggregate to be more than Rs 20,000.

Thus, it is vital to have a strict regulatory mechanism wherein political parties have to report the correct quantum and source of donations received.

As several large donations have also been made in cash, the EC should issue a directive to political parties to accept donations above Rs 20,000 only through cheques, the ADR demands.

Provisions of the Representation of People Act relating to filing of contribution reports by parties should be strictly followed. Parties who fail to abide by the provisions of the Act must not be allowed to avail tax relief under the Income Tax Act.

Section 29C of RPA must include all donations made by any individual or company amounting to over Rs 20,000 during the said financial year and not only single donations made over Rs 20,000.

There should be a strict mechanism for donations received in cash through sale of coupons.

Investigate the role of corporate and foreign entities in setting up of electoral trusts for making donations to political parties.

More transparency is needed in the functioning of Electoral Trusts. Political Parties must be declared as public authorities, demands the ADR.